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TheStreet Open House

Citrix, IBM and Rackspace Are Undervalued, Google, Microsoft and Yahoo! Are Overvalued

Stocks in this article: CTRXGOOGIBMMSFTRAXYHOO

(Corrects article from 6 a.m. EST to say the Citrix Systems weekly chart is negative.)

NEW YORK (TheStreet) -- Most traders and investors consider stocks trading higher as the best stocks to buy while stocks trading lower are considered the worst stocks to buy. I screened data using www.ValuEngine.com to find three tech stocks that have buy ratings and are undervalued on share price weakness, and to find three stocks that have hold or sell ratings that are overvalued on share price strength.

There were several additional candidates on both sides of this pendulum but over time all six of the stocks I selected have had their ups and downs based upon investor emotion and technical momentum.

Here are my three buy-rated undervalued tech stocks that have already slumped in price.

Citrix Systems (CTXS) ($58.73 on Jan. 28) has a buy rating and is 17.6% undervalued with a loss of 17.8% over the last 12 months. This profile was prepared pre-earnings and is posted after the application software company reported quarterly results afterhours on Wednesday.

This tech stock set an all-time intraday high at $77.16 on Sept. 20 and has been below its 200-day SMA since Oct. 8 trading as low as $54.52. Today the 200-day SMA is the reversion to the mean at $64.32. The weekly chart is negative with the stock below its five-week modified moving average at $59.93. The upside for the stock is to my annual risky levels at $68.20 and $71.60.

International Business Machines (IBM) ($176.85 on Jan. 28) has a buy rating is 13.2% undervalued with a loss of 13.7% over the last 12 months. The IT tech giant beat earnings estimates by 12 cents earning $6.13 a share on Jan. 21. The stock was testing its 200-day SMA pre-earnings that day then declined from its 2014 high at $190.81 to as low as $176.16 on Tuesday.

Today the 200-day SMA is the reversion to the mean at $189.84. IBM has a negative weekly chart with its five-week MMA at $182.05 with its 200-week SMA at $176.68 tested at Tuesday's low. My monthly and annual value levels are $174.27 and $170.81 with quarterly and annual risky levels at $209.00 and $210.61.

Rackspace Hosting (RAX) ($37.32 on Jan. 28) has a buy rating is 13.9% undervalued with a loss of 52.4% over the last 12 months. The cloud IT services company has been below its 200-day SMA since Nov. 12 trading as low as $32.62 on Dec. 9 with the 200-day as the reversion to the mean at $43.09.

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